THE EVALUATION OF CREDIT MANAGEMENT ON THE PERFORMANCE OF SMALL-SCALE ENTERPRISES IN NIGERIA

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Öz

This
paper presents a framework for
understanding the importance of credit management as it affects the
performance of small-scale enterprises. Invariably credit management involves
the matter of bad debts and its management. No matter how efficient managers of
credit are, there is always the incidence of bad debts; evaluation of credit
management therefore must involve methods of debt recovery. Credit management
examines how financial institutions respond to credit facilities given to their
customers and how the small- scale enterprises react to methods of credit
management. Small-scale enterprises are basically grass-root businesses that
support the livelihood of entrepreneurs and in turn create jobs and reduce
poverty to a large extent. It is essential that credit facilities extended by
the financial institution to the small-scale enterprises are properly managed
in order to ensure repayment of facilities and growth of the small-scale
business. This brings us to how the management of credit influences the
performance of such businesses. Primary Data were utilized through the
Questionnaires administered on deposit money banks, micro finance banks as well
as selected small-scale business owners. Descriptive statistics were employed
to analyze the data using SPSS so as to test the hypotheses. It was observed
that most small-scale owners do not
have the expertise to maintain proper records of their activities. Banks should enlighten their customers on
importance of proper record keeping, utilization of the credit facilities given
to them, and the necessity for prompt repayment of facilities. The study
is expected to be useful to entrepreneurs, players in financial institutions
and policy makers of the economy.